Wire Less: a decade of telecommunications reform in South Africa

Abstract

This thesis seeks to explain why a relatively well-resourced, democratic, developing country such as South Africa, with a well-articulated understanding of the centrality to any modern economy of an extensive information infrastructure with affordable access to services, has failed to deliver on this primary national objective. It does so by examining the interplay between the transforming state and the telecommunications sector. It deploys the conceptual framework of an ‘institutional constellation’ to provide a lens through which the empirical evidence is viewed. This is gathered through a series of in-depth interviews with key decision-makers in the sector which are used, together with extensive document analysis, to build a case study of the first decade of post-apartheid reform. While the application of the ‘institutional constellation’ exposes some of the structural determinants of the negative policy outcomes, such as the conflicts of interest in the institutional arrangements, the examination of ‘institutional change’ enables the identification and tracking of the actors who have been the carriers of ideas that have affected policy shifts or stasis – whether by instituting new programmes or by resisting them. The analysis of the empirical data through this framework is undertaken in the context of the international reform pressures and the transforming political economy of South Africa. Doing so demonstrates how policy formulation in the telecommunications sector in South Africa has been marked by the conflicting needs of the new state to build its credibility internationally through the adoption of the global reform model, while, at the same time, imposing its transformative agenda on the development of the sector. The tensions between the international orthodox reform model, which relies on the reform of markets and autonomous regulation, and the developmental imperatives of the State, which it believes are realisable only through state intervention and control, are exposed through an examination of the three overlapping reform periods in the last ii decade. These broadly coalesce around the privatisation of the monopoly incumbent operator; the further liberalisation in the mobile market and the end of the monopoly in the fixed line market; and finally the ‘convergence’ period. Through a detailed examination of the institutional filters of the reform process, the evidence tracks how as a result, South Africa found itself increasingly straddling two reform approaches, often in tension with one another, and unable to deliver on either. In doing so the research contributes to the limited existing body of work on the telecommunications reform process in South Africa by extending the largely economic analysis of the sub-optimal performance of the sector to the political realm. It does so by contextualising sector developments in the changing political economy of the first decade of democratic rule in South Africa. The outcome is a detailed case study of privatisation, liberalisation and convergence in a transitional democracy and developing economy, which exposes the complex set of factors that have contributed to the often-perverse policy outcomes over the last decade and which ultimately tells the story behind the first decade of post-apartheid telecommunication reform.